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Gold Rises Over 1% as US Fed Ramps Up Support Measures to Boost Coronavirus-stricken Economy

Representative image. (Reuters)

Representative image. (Reuters)

Spot gold climbed 1.7% to $1,578.83 per ounce by 0116 GMT. The metal rose 3.7% on Monday, its highest percentage gain since June 2016.

  • Reuters
  • Last Updated: March 24, 2020, 9:08 AM IST
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Gold prices rose on Tuesday, following a near 4% jump in the previous session after the U.S. Federal Reserve announced unprecedented measures to support an economy that is reeling from the coronavirus pandemic.

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Spot gold climbed 1.7% to $1,578.83 per ounce by 0116 GMT. The metal rose 3.7% on Monday, its highest percentage gain since June 2016.

U.S. gold futures rose 1.6% to $1,592.20 per ounce.

For the first time, the Fed will back purchases of corporate bonds, backstop direct loans to companies and will "soon" roll out a program to get credit to small and medium-sized business.

Asian shares were set to rally as the U.S. central bank pledged to help the economy from a fallout. MSCI's broadest index of Asia-Pacific shares outside Japan added 0.5% in early trade.

President Donald Trump said on Monday he is considering how to reopen the U.S. economy when a 15-day shutdown ends next week, even as the coronavirus spreads rapidly.

A far-reaching virus economic stimulus package remained stalled in the U.S. Senate on Monday as Democrats said it contained too little money for states and hospitals and not enough restrictions on a fund to help big businesses.

Global central banks also took various measures to mitigate the damage of the outbreak, with Australia's central bank proposing to buy $2.35 billion in government bonds, while Germany agreed for a package worth up to $808 billion.

Three of the world's largest gold refineries said on Monday they had suspended production in Switzerland for at least a week after local authorities ordered the closure of non-essential industry to curtail the spread of the virus.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 1.8% to 923.99 tonnes on Monday.

Palladium surged 7.3% to $1,844.50 per ounce, while platinum rose 4.5% to $671.11 and silver jumped 5.4% to $13.97 per ounce.

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